Future disruptions won't look like the disruptions of the past. Waves of change enabled by the Internet and — more recently — mobile technologies have radically reshaped industries in their own unique ways: just like how Amazon upended retail or how Uber changed the taxi industry. But these disruptions have already saturated most industries and become part of the status quo.
Going forward, digital transformation will be shaped and defined by other factors. For the CIO and other C-suite executives, data plays a critical role in that innovation, however, its successful application needs to be creatively envisioned. With the growth of enabling technologies and increased interconnectedness, data is quickly becoming its own form of currency within the enterprise world.
The drivers of digital transformation
Our recent global C-suite study found that while digital giants, outsiders and startups were seen as largely responsible for driving earlier waves of disruption, today’s disruption is controlled more by innovative industry incumbents. An IBM Institute for Business Value survey of more than 12,500 C-suite executives from around the world found that 72 percent of those surveyed believe today's disruption is being led by these incumbents.
These innovative incumbents have their past efforts to thank for their strong positioning digital transformers. Businesses that survived the wave of mobile disruption now have modern assets and infrastructure in place to power their organizations. This combination of critical partnerships, in-house digital assets and experience in navigating industry disruption makes them well-equipped to participate and even lead in a digital transformation that will feature data as a primary agent of change.
Data as connective tissue
Data is widely understood as a window used to understand consumers on a deeper level. Our survey found that eighty-two percent of leading C-suite executives believe that their enterprises are effective at using data to understand undefined and unmet customers’ wants and needs.
This data is instrumental for platform builders and operators as they work to better serve customers and identify hidden opportunities. Increasingly though, data's application is being used to improve higher-order objectives: As CIOs integrate new technologies and find new ways to harness the power of data, this information and resulting insights are driving iterative strategy enhancements, improving optimization and even informing overall business strategy.
Consequently, some CIOs are leading their businesses toward a platform-driven business model, attempting to build technology stacks that take advantage of data opportunities and flex the ability to scale quickly. Our study found that 57 percent of leading organizations with a strategy to disrupt were either builders or owners of a platform business model. Investments into this approach continue to rise: we estimate that capital reallocation for enterprise platforms could hit $1.2 trillion USD within the next two to three years, an increase of 174 percent from today's current level of investment.
An insatiable demand
There is a cycle of innovation powered by the platforms and tools that both produce and consume data. It important to keep that flow going in a secure and responsible manner. While emerging technologies such as IoT and AI can generate new, valuable data, they also require an enormous volume of data to operate in the first place. The half-life of this data — especially the data being input into new technologies — continues to shorten as iterative insights continue to develop, which further increases the demand for information.
In short, the platforms and technologies critical to today's CIO are data gold mines — but they are also heavy consumers of data. This creates a continuous need for new data and channels able to meet their demand.
Data's growing role in business strategy development is aligning IT more closely with the overall enterprise and transforming the CIO's role into one that must both consider and serve all aspects of the business — not just its information technology. Disruptive brands are already working on this transition, if they haven't fully shifted the CIO's duties away from day-to-day oversight and toward larger, long-term business initiatives. In doing this, CIOs and others approach industry disruption as they change the fundamental rules of how a business is run.